NASHVILLE, Tenn. (AP) — Corrections Corp. of America’s first-quarter earnings rose 7 percent as the federal and state governments shifted prisoners to privately run facilities, the prison operator said Tuesday.

The company also announced it plans to increase its capacity at Adams County Correctional Center in Natchez by 564 beds, pushing the total to 2,232. The expansion is expected to cost $135 million.

Net income rose to $35 million, or 28 cents per share, from $32.6 million, or 26 cents per share, in the year-ago period.

The results beat the 27 cents per share expected by analysts in a Thomson Financial poll.

A 7 percent increase in the number of available cell beds helped push revenue 11 percent higher to $388.4 million from $350.5 million last year. Analysts expected revenue of $387 million. The average daily number of prisoners for which the company received payment rose 6 percent to 75,544.